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RAWALPINDI, Sept 16: The Rawalpindi Cantonment Board (RCB) is going to abolish the old system of property tax collection, it has been learnt.

A senior official told this reporter that the civic agency would soon introduce an area-wise property tax structure after getting a nod from the Military Lands and Cantonments Department.

He said under the old system, property tax was based on the value of buildings for domestic and value of rent for commercial units.

But the civic body now wants to replace the system because most of the big bungalow owners and small house owners are paying the tax at the same ratio. Under the current system, the owners of 10-marla houses in both posh and low-income areas are paying the same tax, which is considered by many as unfair.

“Under the new system, an assessment will be carried out as per square feet and value of the area. The cantonment area will be divided into seven parts and some of them will be declared low income, average and posh, and the tax will be collected accordingly.”

The official said the RCB had sent provisional bills of property tax as it would be increased before the end of this year. The commercial property tax will increase manifold but the domestic tax will go up by not more than 10 per cent.

The official said total 62,000 residential and 2,000 commercial unit owners were paying taxes. The RCB collected Rs310 million under the head of property tax during the fiscal year 2011-12 and now plans to recover Rs400 million during the current fiscal year.

More than 70 per cent commercial property owners have not been paying their property tax regularly, he said, adding an amount of Rs1.6 billion property tax had remained outstanding for the last 10 years.

“Last year, the RCB had planned to increase the property tax by 10 per cent for domestic units and 25 per cent for commercial units with effect from 2011 to 2014 but after resentment from the public it was enforced for only one year,” he said.

When contacted, Cantonment Executive Officer Rana Manzoor Ahmed Khan said they were waiting for the approval of the new system by the Military Lands and Cantonment authorities.

“We have done the homework and divided the area into different categories. The assessment will be started after getting the final nod,” he said.

He said the new system was based on equity and rationality. “The role of the civic body’s inspectors will be minimised as in the existing system they calculated the property tax on the basis of its value,” he said.

“Under the new system, the residents of low-income areas will pay less property tax and those in the posh areas will pay more,” he said and added that the new system was not against the wealthy people but would bring all the domestic and commercial units under the tax net.